Multipurpose Loan, also sometimes referred to as Personal Loan, is a versatile financial tool that simplifies financial life by empowering you to achieve multiple financial goals with a single, convenient loan.
From consolidating debt to funding life’s milestones, a Multipurpose Loan is a flexible loan option that helps you cover unexpected expenses easily and provides flexibility and peace of mind.
Curious about the power of a Multipurpose Loan? Let us dive into the details and learn what is a Multipurpose Loan, its key features, eligibility requirements, application process and more!
Why should you go for a Multipurpose Loan?
As the name suggests, this loan type can be used for various purposes. A Multipurpose Loan is one of the most attractive financial products, offering flexibility, convenience, and financial help.
This loan for various needs merges all your financial obligations into one manageable loan, which, in turn, provides easy access to funds at a low interest rate and reduces stress and complexity.
Thanks to a Multipurpose Loan, you:
- No longer have to juggle between versatile loan types.
- Do not have to worry about overlapping repayment deadlines.
- Do not have to deal with potential mounting interest charges or penalties on non-payments of EMIs.
Features & advantages of Multipurpose Loan
Key characteristics
- Quick Application and Disbursal: You can easily apply for a Multipurpose Loan online and receive instant financial support to address your needs efficiently.
- Flexible Tenure: With loan tenures of up to 7 years, a Multipurpose Loan offers flexible loan options that are designed to cater to diverse financial situations and cash flows.
- Minimal Documentation: A Multipurpose Loan features a simplified and hassle-free application process which expedites the approval of multi-use personal financing and results in minimal delays.
- No Collateral: Offering collateral-free financial support, a Multipurpose Loan allows you to access funds without risking your assets or limiting your financial freedom.
Perks of a Multipurpose Loan
- Competitive Interest Rates: A Multipurpose Loan comes with an affordable interest rate, minimising borrowing costs and reducing financial burden.
- Convenience: Offering swift disbursal of funds, this type of loan serves as a one-stop solution for various financial needs, including expenses related to weddings, home renovation, higher education, travel plans, etc.
- Easy Repayment: A Multipurpose Loan offers flexible repayment tenures, pocket friendly EMIs and seamless repayment options, making the repayment process stress-free.
- Higher Loan Amounts: With a Multipurpose Loan, you can avail of higher loan amounts and realise your financial goals and dreams effortlessly.
Eligibility criteria for Multipurpose Loan
- You must be at least 21 years old.
- You must not be older than 60 years at the time of maturity of the loan.
- You must have a net monthly income ranging between ₹15,000 and ₹25,000.
Documentation required for a Multipurpose Loan
- KYC documents, such as PAN Card, Aadhaar Card, Voters ID, Passport or Driving Licence (any one)
- Last 3 months’ bank statements
- Latest salary slips (3 months) and Form 16
- Complete filled out application form
- Duly signed ECS forms/ loan agreement and Standing Instructions (SI) request form.
Click here for detailed documentation requirements.
How to apply for a Multipurpose Loan?
- Visit the official website of your chosen bank. For example- Axis Bank.
- Select “Explore Products” from the main menu.
- Hover your mouse over the “Loans” option and choose “Personal Loan” from their versatile loan types.
- Click on “Apply Now”.
- Enter your personal details, including mobile number, DOB, PAN number, etc.
- Enter the OTP received on the given mobile number.
- Fill out the application and form and upload the required documents.
- Complete the eKYC process to verify your identity and submit your application for a loan for various needs.
Interest rate for Multipurpose Loans
The interest rate for Multipurpose Loans is not fixed and varies significantly across lenders and borrower profiles. However, it is important to note that typically this rate falls between 11% and 22% per annum.
This means any two borrowers may attract different interest loan rates depending on various factors. Therefore, it is suggested that you carefully review the loan’s terms and conditions beforehand.
Fees and charges of Multipurpose Loan
- Processing Fee A non-refundable charge, usually up to 2% of the loan amount (not including GST).
- Stamp Duty Charges A government-imposed fee levied on loan documents.
- Part or Pre-Payment Charges A fee charged when a borrower settles the loan or part of a Multipurpose Loan before the due date or loan period.
- Cheque Dishonour Charges A charge imposed in the event of cheque bounce or dishonour.
Factors to consider before opting for a Multipurpose Loan
- Interest Rate: To get the best deal, it is crucial that you compare interest rates across lenders and choose the one that offers multi-use personal financing at a low interest rate.
- Loan Terms: Carefully reviewing Multipurpose Loan terms helps streamline the selection process and find the loan that aligns with your financial situation and goals.
- Additional Fees and Charges: To avoid hidden expenses and financial strain, it is recommended that you evaluate the associated fees and charges in advance.
- EMI: Getting an estimate of the EMIs on multi-use personal financing can provide insight into your monthly repayment obligations, prevent unexpected financial shocks, and ensure effective budgeting.
- Lender’s Reputation and Credibility: To ensure trust, reliability, and transparency, conducting thorough research on the lender’s reputation and market credibility is essential. This step prevents fraud and scams and provides a stress-free loan experience.
Also Read: Complete guide to Personal Loan approval process
FAQs
What is the loan amount I can get with a Multipurpose Loan?
The loan amount for Multipurpose Loans varies significantly, usually ranging from ₹50,000 to ₹40,00,000. To get an accurate estimate, it is best to check the website of the chosen lender.
Can I prepay my Multipurpose Loan?
Yes, you can prepay your Multipurpose Loan. However, some conditions that may apply, such as prepayment charges. Therefore, you must verify the terms with your lender before prepaying your Multipurpose Loan.
What is the repayment period for a Multipurpose Loan?
The repayment period for a Multipurpose Loan usually lasts between 12 months to 84 months.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
